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| Edited By: Yogesh Mehta |Source: DNA |Updated: Aug 13, 2018, 05:25 AM IST
The Indian markets had a euphoric week, touched new highs in every session with broad-based participation by the mid and small cap stocks. Nifty closed at new life high at 11429.50 and gained 0.60% week on week. The midcap index gained marginally by 0.12%.
Among the sectors, all the sectors ended with gains except Pharma which lost 3.82%. Bank Nifty outperformed with a gain of 1.55% led by the private banks especially strong rally in ICICI Bank and Axis Bank. Last week, the foreign institutional investors (FII) bought equities worth Rs 1,371 crore while the domestic institutional investors (DII) sold of Rs 301 crore.
In the last week highlights, Indian markets rallied and all the major indices made their new lifetime highs. Nifty touched 11495 despite the negative global headwinds in terms of a trade war between the US, Iran and Russia, rising dollar-rupee and stable Crude prices around $73/bbl. Major contributors to the 50-share index were ICICI Bank, Axis Bank, Eicher Motors, Hindalco and Bajaj Finance post reporting the good result. However, Lupin dragged 8.6% on weak results and rest of the Pharma stocks also joined the bandwagon in weakness. HDFC Asset Management shares listed with a premium of 65% to the initial public offering (IPO) price.
The Reserve Bank of India (RBI) said that it will transfer Rs 50,000 crore as dividend to the government for FY18. This will give more elbow room to infuse capital into the public sector banks. India's industrial output growth rose to five months high of 7% in June month driven by growth in manufacturing, mining, electricity, capital goods and consumer durables.
This week there are no major global events. However, the India inflation and July month trade balance data will be released tomorrow. Indian markets will be closed on Wednesday due to Independence Day celebration. In the concluding result season Cadila, Sun Pharma, Tata Steel, Tata Chemicals, Grasim, Indian Oil, Amar Raja Batteries, Coal India etc. will announce their Q1'FY19 earnings in this week. Tata Consultancy Services (TCS) buyback record date is on Saturday.
As the earnings season will get over in this week, markets will return its focus to the global developments and will take cues from the global indices movement. Stock specific activities could be seen also. Also, one cannot rule out volatility as the current rally was very sharp, the market can take a breather from current levels.
Technically on a weekly scale, Nifty has made a 'Spinning Top' pattern which indicates the index rally can continue only if it crosses 11500. Next resistance could be around 11600 while on the downside important supports is at 11330. Drift below this level can change the current market trend and can correct till 11250 and 11170 levels. For the week trading range could be between 11500 and 11250.
The writer is VP-Retail Research, Motilal Oswal Securities Ltd.
